~ JUDGMENT No.. 393/.8%._. CATCHWORDS Trade practices (consumer protection) - negligent advice - banker and customer - borrowing by customer in Swiss francs - substantial decline in value of Australian dollar with consequent increase in customer's liability - alleged misrepresentations by bank concerning nature and effect of transaction - alleged failure by bank to advise customer of risks involved in transaction and to hedge against possible fall in value of doliar - questions at issue questions of fact rather than principle. Trade Practices Act, ss. 52, 53 ESTHER KULLACK v. AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED No. QG300 of 1987 fh OS Coram: Fox, Sheppard and Beaumont JJ. Date 8 July 1988 Place: Sydney IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION No. QG300 of 1987 ee eens ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ESTHER KULLACK Appellant AND: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED First Respondent PAUL HARWOOD Second Respondent MINUTES OF ORDER JUDGES MAKING ORDER DATE OF ORDER WHERE MADE THE COURT ORDERS THAT: — 1. The appeal be dismissed. 2. The appellant pay to the appeal. NOTE: Settlement and entry of the Federal Court Fox, Sheppard and Beaumont JJ. 8 July 1988 Sydney respondents their costs of the of orders is dealt with in Order 36 Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT REGISTRY ) No.QG300 of 1987 ) ) GENERAL DIVISION ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ESTHER KULLACK Appellant AND: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED First Respondent PAUL HARWOOD Second Respondent CORAM: FOX, SHEPPARD and BEAUMONT JJ. DATE : 8 JULY 1988 REASONS FOR JUDGMENT THE COURT: This 18 an appeal from a judgment of a single judge of this Court (Pincus J.) in which his Honour dismissed a claim brought by the appellant, Mrs. Kullack, against the respondents. The causes of action upon which Mrs. Kullack relied were breaches of s. 52 and para. 53(g) of the Trade Practices Act 1974 and negligence, The causes of action were based on misrepresentations or inadequate advice said to have been given 2. Mrs. Kullack by Mr. Harwood, who was an Assistant Manager of the first respondent ("the Bank") in Rockhampton at the relevant time. It would appear that he acted, if not in name, then by conduct, as the Manager of one of the Bank's' Rockhampton branches. The representations were alleged to have been made and the advice given in relation to a transaction into which Mrs. Kullack entered with the Bank which involved her in _ borrowing from it a sum of money in Swiss francs. The transaction was entered into early in 1984 shortly after the Australian dollar was floated. The amount borrowed by Mrs. Kullack was equivalent to $A300,000. She required $200,000 in order to erect eight home units or town houses on land which she owned. She borrowed $300,000 because that was the equivalent of the minimum amount which the Bank would lend her in Swiss francs. At the time of the transaction the exchange rate was such that each Australian dollar was worth a little over two Swiss francs. Unfortunately the Australian dollar lost value dramatically against the Swiss franc with the consequence' that the relationship between the two currencies became more or less equivalent, that is, in round terms and subject to minor fluctuations, one Australian dollar became equivalent to one Swiss franc. Undoubtedly Mrs. Kullack has suffered a grievous loss, which if she has to bear it herself, will have most serious consequences for her financially. The Bank brought against her a cross claim seeking judgment for the amount owed to it including interest. His Honour directed the entry of judgment for the first respondent against 3. Mrs. Kullack on the cross claim, the amount of the judgment being in Swiss francs rather than Australian dollars. Mrs. Kullack is a native of France. She understands and speaks English well but not without some difficulty from time to time. Before the learned primary Judge she was represented by counsel but before us she appeared in person. The matter first came into the list on 14 April 1988. She presented tous a detailed written submission in support of her appeal. This had not previously been seen by counsel for the respondents and we thought the better course to adopt was to provide them with an opportunity of considering the submission and replying to it in writing. To this end we stood the appeal over to 3 June 1988. We made directions requiring counsel for the respondents to lodge written submissions and Mrs. Kullack to lodge submissions in reply prior to 3 June 1988. We then heard Mrs. Kullack and counsel on a number of matters arising from their written submissions which in each case were very full and adequate to cover most of the matters upon which they relied. Since we reserved our decision, Mrs. Kullack has lodged yet further written submissions which have been answered by submissions in writing by counsel for the respondents. Fresh Evidence Mrs. Kullack sought leave to rely upon fresh evidence. The evidence consisted of a number of documents which had been available to her to tender through her counsel at the trial. They mostly comprised letters, diary entries and other memoranda which had been made available by the Bank on discovery. Some of 4. these documents were handed to us on 14 April 1988 and others lodged with the Registrar with Mrs. Kullack's submissions in reply. We heard her on the significance which she attached to each of the documents and the reason why 1t should be admitted in evidence bearing in mind that all the documents had been available to her at the trial. We reserved the question of their admissibility and it 1s appropriate that we give our decision on that matter first. The principle which binds us has been stated many times. It is enough for present purposes to refer to what was said by Dixon J. (as he then was) in Orr v. Holmes (1948) 76 C.L.R. 632 at p. 640, namely:- "If a trial has been regularly conducted and the party against whom the verdict has passed cannot complain that evidence has been wrongly received or rejected or that there has been a misdirection or that he has not been fully heard or has been taken by surprise or that the result is not warranted by the evidence, the successful party is not to be deprived of the verdict he has obtained except to fulfil an imperative demand of justice. The discovery of fresh evidence makes no such demand upon justice unless it is almost certain that, if the evidence had been available and had been adduced, an opposite result would have been reached and unless no reasonable diligence upon the part of the defeated party would have enabled him to procure the evidence." The emphasis is ours. We have considered each of the documents tendered. It 1S our view that the tender of them at the trial could not have made any difference to the outcome nor would their reception in evidence by us affect the result of the appeal. Indeed, a number of them 5. are plainly irrelevant; others are on no basis admissible because they purport to be opinions of persons about matters of objective fact which are in issue in the case. Opinion evidence of this kind is not admissible. Added to this 1s the fact, as we have mentioned, that the documents were all available to Mrs. Kullack at the trial. The reception of the documents in evidence would be contrary to a long established principle of law. Accordingly, they are rejected, but we repeat that none of the documents would, in our opinion, affect the outcome of the case. The Foreign Currency Loan Application and the Statement of Claim Of critical importance in the resolution of the case is a document entitled "Foreign Currency Loan Application - Form 8," which is sometimes referred to in the evidence as Form B. Several of the issues in the case centre upon it. However, it should be understood at the outset that one of the grounds of appeal is a challenge to a finding by his Honour that Mrs. Kullack was bound by more than the last two pages of the document. The essential allegations made by Mrs. Kullack against the respondents were pleaded by her in a further amended statement of claim ("the statement of claim") filed on 9 September 1987. In para. 5 of the statement of claim it was said that Mrs. Kullack did not acknowledge executing Form B, but only acknowledged that part of it which was referred to as_ the "Schedule" on page 8 of the document. In the course of the run of the hearing at first instance it became apparent that Mrs. Kullack had initialled clause 12 on page 7. Thereafter her case was that only pages 7 and 8 comprised the loan contract with the Bank. That was her case on appeal. 6. Paragraph 6 of the statement of claim alleged that during the course of the negotiations and before Mrs. Kullack signed Form B, Mr. Harwood orally represented to her:- "(a) that the only real property securities in respect of the agreement required by the First Respondent were those set out in Item 9 of the Schedule thereto; (b) that the amount of the debt which the Applicant would owe the First Respondent pursuant to the agreement and for which the Applicant would have to provide a security was the sum of $300,000.00; (c) that the rate of interest charged in respect of the loan would vary with fluctuations in the exchange rate; (d) that the First Respondent would retain the sum of A$60,000.00 out of the principal amount of the loan as a fund out of which it could reimburse itself should the effects of exchange rate fluctuations increase the amount of interest payments due under the agreement; (e) that the said sum of AS$60,000.00 would be sufficient for the purpose stated in the preceding sub-paragraph; (f) that the Australian dollar 'was very good and would not decline.'" Paragraph 7 was as follows:- "The Second Respondent in making the representations impliedly represented to the Applicant: (a) that the Applicant would be liable to repay the principal sum of AS$300,000.00 only; (b) the First and Second Respondent believed that: (i) there would be no substantial fluctuations in the value of the Australian dollar; (ii) alternatively, any fluctuations in the Australian dollar would 7. not increase the amount which the Applicant would be liable to repay; (c) facts existed which justified a belief that: (i) there would be no substantial fluctuations in the value of the Australian dollar; (ii) alternatively, any fluctuations in the Australian dollar would not increase the amount which the Applicant would be liable to repay; (d) no facts existed which indicated that: (i) there would be fluctuations in the value of the Australian dollar; (ii) fluctuations in the Australian dollar would increase the amount which the Applicant would be liable to repay." Paragraph 9 alleged that Mrs. Kullack was induced to sign the document described as "Foreign Currency Loan Application - Form B" by the representations referred to in para. 6 and the implied representations referred to in para. 7. Paragraphs 10 and 11 alleged that each of the representations in paras. 6 and 7 was untrue and para. 12 that they were misleading or deceptive or likely to mislead or deceive with the consequence that Mr. Harwood, as agent for the Bank, had acted 1n contravention of s. 52 and para. 53(g) of the Trade Practices Act. Form B is a document comprising eight pages the last of which is headed "Schedule." There is no issue that Mrs. Kullack's signature appears at the end of that page (which is the last page of the document) nor that the signature of a Mr. E.M. James, who was a Justice of the Peace, appears thereon as a witness to the 8. document. There is, however, a question whether Mr. James placed his signature on the document in Mrs. Kullack's presence and, more importantly, whether he saw her sign it. As earlier mentioned, Mrs. Kullack maintained that her contract with the Bank comprised only pages 7 and 8 of the document, that is page 7 and the Schedule. His Honour found that the agreement was contained in the whole document and not just pages 7 and 8. It is convenient now to refer to the relevant provisions of Form B ignoring for the moment Mrs. Kullack's contention that the first six pages do not bind her. Clause 1 of the document contained certain definitions. Clause 2 provided for certain conditions precedent one of which was the provision of securities. We shall refer to these later on. Clause 3 provided for the drawing of the loan, clause 4 for repayment and clause 5 for interest. Clause 6 provided for payments. Sub-clause 6.01 was as follows:- "6.01 All payments whether of principal interest or otherwise due to be made by the Customer hereunder shall be made in the Loan Currency and shall be made to the Bank in immediately available funds not later than 11.00 am (local time) on the due date for payment." The expression "Loan currency" was defined in clause 1 to mean the foreign currency in which the loan facility was "denominated" in the Schedule and "Loan facility" meant the principal amount expressed in Australian dollars set out in the Schedule to be made available to the customer during the availability period and thereafter the aggregate of Australian 9. dollar amounts of all advances made to the customer and outstanding at any time. "Availability period" was the period set out in the Schedule commencing on the date Form B was signed, namely, 24 January 1984. The Schedule showed that the loan facility was $A300,000 and the loan currency, Swiss francs. The availability period was to expire one month after the date of Form B. Clause 7 dealt with taxes, clause 8 with changes in the applicable law and clause 9 with repayment. Clause 11 provided for default. Clause 12 provided for exchange rate indemnity and was as follows:- "12.01 If at any Interest Payment Date after the end of the Availability Period or after the Loan Facility is drawn in full (whichever is the earlier) the equivalent in Australian dollars of the amount of the Loan Currency outstanding under the Loan Facility converted at the Bank's spot rate of exchange two Banking Days prior to such date exceeds the Loan Facility ("the excess") the Customer shall lodge with the Bank the amount of the excess on term deposit in Australian dollars from such date for the period ending on the next succeeding Interest Payment Date at the Bank's interest rate for term deposits of like tenor and amount current on the date of lodgment (with interest to be paid to the Customer), and any such term deposit maturing on an Interest Payment Date shall be applied to meet the Customer's obligation to lodge a term deposit with the Bank pursuant to this Clause 12.01 on such date and on a_ Repayment Date the Bank shall be entitled to apply and set off such term deposit against the obligation of the Customer to repay the Loan Facility." 10. This clause is significant. It as referred to in the evidence as a "clawback" clause or arrangement and was intended to enable the Bank to call upon Mrs. Kullack to keep the amount of her capital indebtedness from time to time equivalent to $A300,000 so that, 1f the value of the Australian dollar as against the Swiss franc fell, she would be obliged to make payments on the dates specified to reduce her capital indebtedness to $A300,000. The clause provided for the lodgment by Mrs. Kullack of a term deposit in Australian dollars. Such a deposit was lodged in the sum of $A60,000. It is to be remembered that Mrs. Kullack initialled clause 12. She did so because some of the printed words were crossed out. There is no issue about this matter. It remains to mention the provisions of para. (c) of clause 2.01 which dealt with securities. The advance was made subject to the provision of satisfactory securities. These were referred to in the Schedule. They comprised a letter of charge over the term deposits to be provided pursuant to clause 12, mortgages of four parcels of land owned by Mrs. Kullack either alone or jointly with either her husband or her daughter and a number of guarantees. These securities were provided. In addition Mrs. Kullack gave a mortgage over the land upon which the units were to be built. This is the subject of a complaint by her which is independent of the complaints she makes about the transaction involving the borrowing of Swiss francs. Her complaint was pleaded in para. 6(a) and paras. 13A to 13H of the statement of claim. In essence it was that she did not know that' the mortgages she executed included a mortgage over the land upon 11. which the units were to be built. The existence of the mortgage created difficulties for her, so she said, when she came to sell the units. Paragraphs 13B and 13C of the statement of claim were as follows:- "13B Prior to the Applicant executing the aforesaid Bill of Mortgage, the Second Respondent for himself and as the agent for the First Respondent represented to the Applicant that the said Mortgage was in respect of the land agreed on and as referred to in Item 9 of the Schedule to the ''Foreign Loan Application - Form B'. The representation was oral or alternatively constituted by the silence of the Second Respondent concerning the inclusion of land comprised in Certificate of Title Volume C406 Folio 179 and the failure of the Second Respondent to alert the Applicant to the inclusion of the said land in the Mortgage. (a) The said Mortgage was over land on which subsequently eight home units were erected. (b) The individual titles for the said home units did not belong to _ the Applicant in their entirety, as Trust Funds had been used in their construction. 13c The Second Respondent (Mr. Harwood) obtained unregistered Strata Title Plans on land as referred to in paragraph 13B of the representation that other Mortgages would be released." We have found difficulty in understanding para. 13C and have wondered whether it could be consistent with para. 13B(a). Our difficulty is exacerbated by the terms of para. 13D which alleged that the representation in para. 13C was untrue. Whatever the meaning of para. 13C may have been intended to be, it did not itself plead any representation. Rather it referred to one of 12. the representations in para. 13B. More straightforward than paras. 13C and 13D were the terms of para. 13E which alleged that Mrs. Kullack was induced to sign the mortgage by the representation referred to in para. 13B which para. 13F alleged was untrue. Paragraph 13G alleged that' the representations referred to in paras. 13B and 13C were misleading or deceptive or likely to mislead or deceive Mrs. Kullack and constituted conduct which was in contravention of the two provisions of the Trade Practices Act upon which she relies. Paragraph 13H alleged that Mr. Harwood either aided and abetted these contraventions or was knowingly concerned in or a party to them; ss. 75B and 82 of the Trade Practices Act. The causes of action so far relied upon were the causes of action based on breaches of the Trade Practices Act. There followed causes of action based on negligence. Further amendments were made to the statement of claim in relation to these causes of action but it is unnecessary to refer to the detail of them. It was alleged that Mr. Harwood failed to inform and advise Mrs. Kullack:- (a) that should the value of the Australian dollar fall as against the Swiss franc, the amount of principal would increase; (b) that the floating of the Australian dollar made such a_ fall possible and/or likely; 13. (c) that she should "hedge" against the fall of the Australian dollar. Facts were pleaded in order to lay the basis for the duty of care and the breach of that duty upon which Mrs. Kullack relied. It is unnecessary to refer to the detail of these allegations. There was then pleaded an independent cause of action in negligence based on an allegation that Mr. Harwood did not provide Mrs. Kullack with a copy of Form B prior to asking her to sign 1t or draw any of the terms of it to her attention. There were further matters pleaded in the statement of claim but these were not apparently relied upon at the hearing. Certainly there was no argument addressed to us about them on the hearing of the appeal. For that reason it 1s unnecessary further to refer to them. The Facts and His Honour's Findings and Conclusions The evidence in the case consisted of evidence given by a number of witnesses, the principal of which were Mrs. Kullack and Mr. Harwood. His Honour preferred the evidence of Mr. Harwood. But in an early part of his judgment his Honour said:- "Speaking generally, where the recollection of the applicant differs from that of Harwood, I think the latter is more reliable. On the other hand, I am not satisfied that Harwood had as good a recollection of the relevant conversations as he claimed to have and think that in some respects his evidence cannot be entirely relied on. As to the question whether it was the applicant or Harwood who first suggested the possibility 14. that a loan in foreign currency might be obtained, I have been unable to reach a firm concluded view. The matter has some importance, as has the broader question whether the dealings between the respondent bank and the applicant were such as to make the latter think that she was entitled to rely on the respondent for advice about her offshore loan." The evidence led before his Honour was lengthy and complex. We proceed to give an account of it, but it 1s not practical to refer to the whole of it. Some of our account is taken from his Honour's judgment and some not. In the course of the narrative we refer to his Honour's more important findings and conclusions. Mrs. Kullack said that she went to see the Bank with a view to borrowing money to finance the erection of home units on a block of land she owned at Yeppoon, a seaside town near Rockhampton. She had about $90,000 of her own available but' the anticipated cost of the building was in excess of $200,000. She applied to the Commonwealth Bank at Yeppoon for a_ loan. Her application was approved, the interest to be charged on the loan to be 15 per cent per annum. Mrs. Kullack decided tht she would investigate the possibility of getting better terms from the Bank and this led her to see Mr. Harwood. Mrs. Kullack said that Mr. Harwood explained that a loan from his bank would be on similar terms to that offered by the Commonwealth Bank. He suggested as an alternative an offshore loan at a slightly lower rate of interest. Mrs. Kullack said that Mr. Harwood did not claim to have much knowledge of offshore loans but said he would contact head office about it. Mr. Harwood's account of the conversation at the initial meeting with Mrs. Kullack differs from hers. He 15. said that Mrs. Kullack told him that she had applied to her own bank for an offshore loan but that they would not give it to her. She said that a friend of hers, a Mrs. Georgie, recommended that she come to see Mr. Harwood. According to him her opening remarks included a statement that she wished to borrow money in foreign currency. Mr. Harwood said that he had warned her about the consequences of borrowing Swiss francs. He claimed to have said to her at one stage:- ",.. we would require 20 percent of the initial Australian equivalent of the principal to be lodged on term deposit, with a charge taken over that term deposit, to assist the claw-back provision. We required a one hundred percent claw-back provision or a full claw-back it was called. That means that, in this instance, a loan of $300,000, with $60,000 in Australian, held on term deposit. If the value of the Australian dollar dropped, so that the Australian equivalent of the loan became, say,$400,000, we would require her to claw~back the Australian equivalent of the loan back to the original figure of $300,000 which was the amount of exposure we were prepared to accept." After referring to this evidence his Honour said:- "My impression, derived from hearing Harwood's version of the initial interview and that of the applicant, is that the truth, on this point, may well lie somewhere in between the two versions. I am not satisfied that Harwood recommended to the applicant the taking of a loan in Swiss francs, nor that he rather discouraged her in relation to the proposed transaction, as he claims to have done. But the onus is on the applicant; she must obtain findings in her favour and not merely induce a state of uncertainty." 16. Mrs. Kullack denied that she had suggested an offshore loan and also that she had been given any warning about risks involved in borrowing offshore. She said that she had no understanding of the meaning of "offshore loan" before Mr. Harwood mentioned it to her and that he explained what he meant by such a loan when he said, "that you will have an interest [rate] that will change, and it will be between 8 and 12 per cent, according to what currency they will buy." Mrs. Kullack said that Mr. Harwood did not tell her anything else about offshore loans. She said that Mr. Harwood told her that the loan would need the approval of the Reserve Bank. She asked whether the Bank would be prepared to advance her $200,000 to which Mr. Harwood said that he' thought that that amount would be "all right." He said that the Bank would buy overseas currencies and mentioned both Swiss francs and United States dollars. He said if the loan were obtained in Swiss francs the interest rate would be 8 per cent. Mrs. Kullack asked him if that was "good" and he said it was. Mr. Harwood denied that this conversation had occurred in the way recounted by Mrs. Kullack. Mrs. Kullack said that a further conversation with Mr. Harwood occurred at her home at Yeppoon during which he explained about the granting of the loan. He took certain title deeds away with him. Shortly thereafter he told her that she would have to borrow a minimum sum of $300,000. She said that he told her not to worry because what was not spent could be kept in the Bank and, in any event, $60,000 would be needed "to keep for security in case there is any change in the interest that I was going to pay. 17. Mrs. Kullack said that when Mr. Harwood took the title deeds away he did not say "he was going to mortgage them." There was no question of mortgaging them. He just took them. There was no question of mortgaging anything at that stage. Later she was asked what the security for the loan of $300,000 was to be. She said that Mr. Harwood had suggested that he was going to "mortgage the properties ... he have titles on ..." Mrs. Kullack's evidence continued:- "I said, 'Well, it does not seem to me logical' - or words in that effect - 'that you have to mortgage all this property because I think the mortgage should be only when I finish to build the unit, then you should then have a mortgage to repay the $300,000 on the block of units and that will be finished in few months or six months or eight months. I do not see why do you need to take this other mortgages. It just creates also expenses for me like paying stamp duty and so on.' I said, 'You can keep this until I finish building but I do not see the need for mortgaging this, and then have the unit to be mortgaged and you have to give me back those titles.' He said, 'Yes, I understand that very well', but that was the only way he could do it, his head office, or something in relation to his head office, that he could not change, and then I_ said, 'Well, is this block that you are going to take, are they going to represent $300,000 security', and he _ said yes. -.. Then he said, well, my block of land does not have to be mortgaged and will not be mortgaged. Which block of land were you talking about? ---That is the Scenic Highway block, where the units were to be built. How did you describe that block to him? --~Well, the block where the units will be built. He said, 'Yes, that will not be part of it', and when it will be finished, he agree with me that he, we will put then the mortgage on the units, or part represent, and I specified to him, not even on the whole building of eight units, but simply of what it will represent or what they think will secure their $300,000 and he said 'Yes, we 18. will see the value of the units when they are built and then we will do that. We will then do that mortgage on the units and we give you back the other titles that we are mortgaging now. How much did you consider at that stage that the units would be worth, once they were built on this land? ---I thought they would be, because of my involvement in it and works that I did, they would have been at least 100 or $150,000 cheaper and so I give the very reasonable price which I thought $70,000 per unit, 70 to 75. You thought it was worth about $560,000 when it was finished, at that stage? ---Yes, at that stage, yes." This is the evidence which Mrs. Kullack gave in support of her case pleaded in para. 6(a) and paras. 13A to 13H of the statement of claim. His Honour described the appellant's case based on these matters as "vague and improbable." His Honour then returned to the appellant's principal case, namely, that based upon misrepresentations and negligence in relation to the loan in Swiss francs. He said:- "Harwood said, as I have mentioned, that the applicant expressed a desire at their first meeting to borrow in a foreign currency and that he explained to her in detail what was involved in that - i.e. that whatever the exchange rate was at the end of the loan would determine the cost of repaying it in Swiss francs. He claims to have discussed hedging with her and shown her an international bulletin setting out the interest rates for borrowing in different currencies, and also the cost of hedging. He says he explained the notion of ''clawback' to her, as mentioned above. The applicant, according to Harwood, had a great deal to say about the strength of the Australian dollar and that of the Swiss franc and their relationship one to the other. She said: 19. '... 1f there are any fluctuations in the Australian dollar against the Swiss francs, they obviously will happen from time to time and probably over a_ three year period they could quite well even themselves out.' He agreed with the applicant that he had told her that the minimum possible loan of the type sought was $300,000; the veracity of that assertion was in the end not challenged. Counsel for the applicant, Mr. Carmody, who presented her case very competently, suggested that the evidence supported the view that her obligation to repay the loan was one to pay the principal sum of $300,000 Australian and not to repay the original amount of Swiss francs borrowed. I do not accept that either the oral or the written evidence supports that conclusion. I think that the applicant is a person of limited business knowledge and experience, but she must have been aware that there was some essentially different characteristic of the offshore loan which explained its being offered at an interest rate only about half of that available domestically. I am satisfied that she appreciated from the outset that she had to repay either the amount of Swiss francs borrowed or its Australian equivalent at the time of repayment. I do not believe her lack of commercial sophistication was so complete that she was able to convince herself that there were simply two alternative sources of loan capital, one at 8% and the other at 15%, the former having no substantial disadvantage but simply possessing the characteristics (irrelevant from the customer's point of view) that it was derived from a foreign source. I am inclined to think that the applicant exaggerated her commercial or pecuniary naivety. In particular, the assertion mentioned above, that the applicant required to be assured by Harwood that an interest rate of 8% was good, cannot be accepted, nor do I attach any credence to the evidence that Harwood misled her about the purpose of the $60,000 in the conversation I have referred to. I accept Harwood's denial that there was any 20. such conversation (as the applicant admitted) he did not, at the time of his initial conversations with the applicant, have any extensive knowledge of offshore loans. I am satisfied that he appreciated precisely what the $60,000 was for. He had no reason to mislead the applicant about the matter and I do not believe that he did so." His Honour then referred to some other matters including correspondence between the appellant's husband and the Reserve Bank. It is unnecessary to refer to the detail of this evidence. On 7 December 1983 a memorandum was sent from Head Office advising that "Management guideline Clearance" for the facility had been sought from Head Office. Among the conditions specified was the following:- "Margin over SIBOR is 2.5%. Establishment fee is $1,500.00. Six monthly rollovers with full clawbacks to apply. The $60,000 T/D funds are to be utilised for this purpose. Please ensure that customers are made fully aware of the implications of adverse exchange rate movements and the existence of 10% Australian Withholding Tax which will be payable by then." We are uncertain of the meaning of "SIBOR", but nothing turns on it. "T/D" is an abbreviation for "Term Deposit." On 13 December 1983 a relieving manager of the Bank, Mr. J. Lindsay, wrote a letter to Mrs. Kullack. It referred to her request for an offshore loan in Swiss francs to assist with the erection of eight home units at Yeppoon. Mr. Lindsay said that, subject to management guideline clearance approval, Mrs. Kullack's application had been approved subject to a number of 20. such conversation (as the applicant admitted) he did not, at the time of his initial conversations with the applicant, have any extensive knowledge of offshore loans. I am satisfied that he appreciated precisely what the $60,000 was for. He had no reason to mislead the applicant about the matter and I do not believe that he did so." His Honour then referred to some other matters including correspondence between the appellant's husband and the Reserve Bank. It is unnecessary to refer to the detail of this evidence. On 7 December 1983 a memorandum was sent from Head Office advising that "Management guideline Clearance" for the facility had been sought from Head Office. Among the conditions specified was the following:- "Margin over SIBOR is 2.5%. Establishment fee is $1,500.00. Six monthly rollovers with full clawbacks to apply. The $60,000 T/D funds are to be utilised for this purpose. Please ensure that customers are made fully aware of the implications of adverse exchange rate movements and the existence of 10% Australian Withholding Tax which will be payable by them." We are uncertain of the meaning of "SIBOR", but nothing turns on it. "T/D" is an abbreviation for "Term Deposit." On 13 December 1983 a relieving manager of the Bank, Mr. J. Lindsay, wrote a letter to Mrs. Kullack. It referred to her request for an offshore loan in Swiss francs to assist with the erection of eight home units at Yeppoon. Mr. Lindsay said that, subject to management guideline clearance approval, Mrs. Kullack's application had been approved subject to a number of 21. conditions. It is umnecessary to refer to these, but Mr. Lindsay's letter concluded with the words, "In addition, please give due consideration to the implications of adverse exchange rate movements and the existence of 10% Australian withholding tax which will be payable." As his Honour remarked, the inclusion of the statement asking Mrs. Kullack to give due consideration to the implications of adverse exchange rate movements could hardly have accorded with the intention of the writer of the memorandum of 7 December 1983 to "ensure that customers are made fully aware" of the matters mentioned. Nevertheless, the warning was there. Coincidentally it was on 13 December 1983 that the Australian dollar was "floated". As his Honour said, that was expected to and did lead to more rapid changes in the dollar's value against other currencies. Mrs. Kullack was not then bound by the transaction and could have changed her mind. Even after she signed Form B on 24 January 1984, she was not bound to draw upon the loan. She had a further month within which to make up her mind whether to take advantage of it or not. Apparently there was no cross-examination of her on the point, but the floating of the dollar was a matter of substantial public concern at the time and of comment by the media. The reason for Mrs. Kullack's decision to go ahead may have been associated with the fact that for a time after the flotation of the Australian dollar it continued to appreciate against the Swiss franc. It did not begin its slide until some time in February 1985. Until then it was more often at least equivalent to the value it had had against the Swiss franc at the time of the transaction. At times 22. 1t was more valuable. Mr. Lindsay enclosed with his letter a copy of it indicating that the copy should be returned to the Bank with an acknowledgment that Mrs. Kullack accepted the conditions which were offered. Amongst the Bank's records is the copy with what purports to be her signature on it. However, she denied that the signature was hers. His Honour said that he was satisfied that the signature was hers. He reached this conclusion notwithstanding that there was no cross-examination of Mrs. Kullack to suggest that she did sign the document and no evidence, at least directly, that the signature was hers. On the other hand, there are in evidence a number of documents which undoubtedly bear Mrs. Kullack's signature and it would have been open to his Honour to draw his conclusion from a comparison of these signatures with the one appearing on the copy letter of 13 December 1983. The matter is of little moment because Mrs. Kullack does not deny the receipt of Mr. Lindsay's letter. She was at pains to point out to us that the original of his letter was, for some reason, unsigned. It would seem to us that' the fact that the letter was unsigned was due to an oversight and has no sinister implications. Notwithstanding the submissions which were made to us by Mrs. Kullack about this matter we ourselves can attach no significance to the lack of a signature on the letter particularly as Mrs. Kullack admitted having received it. However, a puzzling feature of Mr. Lindsay's evidence is that on 13 December 1983 he sent a memorandum to the State Manager reporting that the terms and conditions had been accepted by Mrs. 23. Kullack. Her point is that, if he needed to await her signature on the copy letter before reporting to Head Office, he could not have had it on 13 December 1983 which was the date of his letter to Mrs. Kullack. The matter 1s puzzling but her admission that she did receive his letter is, we think, the answer to whatever reliance she may be able to place on the justifiable criticism she makes of his evidence. Mr. Lindsay occupied Mr. Harwood's position as Assistant Manager between 12 December and 23 December 1983. It is obvious from his affidavit that he has little recollection of the matter and has refreshed his memory from documents. He was not cross examined and it is therefore difficult to take an adverse view of his evidence in the absence of his being offered an opportunity to explain some of the difficulties which there appear to be about his recollection. The next matter is a matter of substantial dispute between the parties. The Bank's case is that on11l January 1984 Mr. Harwood sent to Mrs. Kullack a letter with which he enclosed Form B. The letter asked Mrs. Kullack to read it but not sign it. The letter said that the signing of the document must be witnessed by the Bank. The original letter is not in evidence. Mrs. Kullack denied having ever received it. Her case is that she was given no opportunity of considering the terms of Form B and that, indeed, only two pages of it were placed before her. As mentioned, there appears on the last page of the form the signature of Mr. James, a Justice of the Peace. In January 1984 he was the Senior Advances Officer at the Rockhamptom and Central Queensland Area Office of the Bank. He examined Form B and said that the signature of the witnessing Justice of the Peace which 24. appeared on page 8 of the form was his. He went on to say that in his capacities as a bank officer and a Justice of the Peace, he was called upon to witness many documents. He could not recall the circumstances surrounding the witnessing by him of Form B. He also said that never in his experience had he witnessed the signing of a document where only part of the document was before the person executing it. He was, and is, careful not to sign as a witness, a document if the document is not executed in his presence. Mr. James was cross-examined. He confirmed that he had no independent recollection of the matter and had given his evidence on the basis of his usual practice and the fact that his signature appeared on the document. He denied a suggestion that, where a document only needed signing in one place, the page which needed his signature was detached from other parts of the document. Nevertheless, he found the absence of his initials against clause 12 (which Mrs. Kullack had initialled) puzzling. The purport of his evidence was that he would have expected to initial the paragraph also and that it was unusual that he had not initialled it "if the initialling of that paragraph was done" in his presence. It should be said at this point that the document is a collection of eight loose pages which are stapled together so that it would have been physically possible for one or two pages to be detached from the others. His Honour saw no reason to doubt that the letter of 11 January 1984 and Form B were sent to be read by Mrs. Kullack. He did not accept her evidence that she saw only the last two pages of the form and said that it was quite unlikely that she would have signed (as she claimed to have done) a document which was 25. only part of a larger whole. He found that Mrs. Kullack initialled the seventh page and signed the eighth at a time when the whole document was collected together and after having had ample opportunity to study it all. The Australian dollar reached a peak against the Swiss franc of about 2.2 francs to the dollar in February 1985. It then began to fall sharply. On 27 March 1985 the Area Manager sent a circular, which Mr. Harwood received, dealing with foreign currency exposures. The theme of the circular was that customers with unhedged foreign currency commitments should be looked at carefully and the position discussed with then. No specific remedial steps were suggested. The circular asked for a brief summary of the Branch position. This was supplied by Mr. Harwood on 9 April 1985. He referred to only one foreign currency loan, it being the loan to Mrs. Kullack. He said, "Position has been discussed with customer. At date of interview, shortfall was $68,000. We already hold $60,000 on T/D (Term Deposit) to meet any such contingency." His Honour thought it safe to infer that Mr. Harwood did discuss the position with Mrs. Kullack and, in particular, did discuss with her the shortfall. In drawing this inference his Honour relied on some handwritten notes of Mr. Harwood in which there appears the statement, "Clawback adjustment required $68,343." By May 1985 1.6 Swiss francs were required to buy an Australian dollar. The dollar continued to decline in value. On 15 August 1985 Mr. Harwood wrote to the State Manager referring to the clawback differential of $76,815.98 and mentioning that 26. $16,815.98 was necesssary to make up the difference between that figure and the $60,000 term deposit. On 5 February 1986 Mrs. Kullack wrote to Mr. Harwood a letter which, in our opinion, is of substantial significance. She asked for the release of certain titles given as security and said:- "Even allowing for the current weakness of the Australian dollar our loan of (now) of $440,000 is fully secured by the value of the townhouses plus the $60,000 retained by the bank." As his Honour said, it is difficult to reconcile what Mrs. Kullack said in the letter with the view that she was unaware that her liability to repay was dependent upon the value of the Australian dollar against the Swiss franc. The statement she made in the letter is inconsistent with her evidence and with the representations pleaded in paras. 6 and 7 of the statement of claim. Moreover, if she had come to realize that she had sucha liability but that it was a liability forced upon her by misrepresentations made to her by Mr. Harwood, it is indeed strange that she made no mention of that matter in her letter. The purpose of the letter was to obtain the release of securities over properties other than those upon which the units had been built. Mrs. Kullack said that the units were now completely established and had a conservative value of $600,000. They were fully tenanted and were largely covering interest payment commitments. She concluded her letter by saying, "In keeping with the spirit of our agreement, I request that the 27. abovementioned land titles be released." Mr. Harwood responded to her letter on 7 March 1986. He declined her request for the release of securities. He assigned as a reason for this refusal the decline in the value of the Australian dollar. He said that there had never been any understanding that security "not involved in the units" would be released once the units were completed. He went on to say that, in terms of the formal agreement for the loan, the clawback provisions should apply. The excess was almost $150,000 over and above the $300,000 and Mr. Harwood said that a further $88,810.38 would be required to be placed on interest bearing term deposit to meet the full clawback requirement. He said, however, that in view of her demonstrated ability to meet interest costs as they occurred, the Bank was willing to let the matter lie for the time being. On 4 April 1986 Mrs. Kullack wrote to Mr. Harwood saying that she had given in trust to hima "Memorandum for Strata Titles of 8 home units in Yeppoon." She said that in return he had promised he would write to Brisbane to obtain the release of the existing securities excluding her house at Adelaide Park Road. She said that these were to be returned to her "as per our agreement." She said that she was surprised to receive his letter of 7 March insisting on having security of the eight home units plus all the other securities and that this was not part of her agreement with the Bank. On 8 April 1986 Mr. Harwood wrote saying that the memorandum of Strata Titles was held by the Bank as security - not in trust. He said the security offered by Mrs. Kullack was over Strata Title units. The fact that the memorandum was unregistered was a concession to her in order to 28. save her expense. On 8 July i986 Mr. Harwood again wrote to Mrs. Kullack setting out the method of calculation of the amount payable on the loan and also saying that in view of the continuing decline in the Australian dollar, the Bank would be undertaking a_ review of its attitude towards the continuation of the loan. His Honour said that the implication was, clearly, that the decline had affected the appellant's liability. Further correspondence of a similar kind was sent in August 1986. On 13 August 1986 Mr. Harwood served notice of cancellation of the facility and of demand on Mrs. Kullack. On 23 August 1986 Mrs. Kullack wrote to the Bank in Brisbane referring to a question which had been asked at an interview namely, "Why should the Bank waive $300,000?" The letter said:- "By the time I will have paid the $300,000 loan (assuming it takes a further seven years) my costs in connection with the home unit project will be in excess of $760,000." The first complaints which Mrs. Kullack made which are consistent with the case she made at the trial and before us were made in a letter to the Bank written on 15 September 1986. The letter contained the suggestion of negligence on Mr. Harwood's part but did not assert any misrepresentation. On 2 October 1986 the Bank issued a writ in the Supreme Court of Queensland claiming $615,015.06. A defence was delivered setting out misrepresentations similar to those alleged in the 29. proceedings here. On 23 January 1987 these proceedings were instituted. As mentioned there have been a number of amendments to the statement of claim but these are not material. The case falls into three broad compartments. These are misrepresentations made in connection with the borrowing of Swiss francs, misrepresentations made 1n connection with the taking of securities by the Bank and causes of action in negligence relating to the borrowing of Swiss francs. His Honour rejected the applicant's case in respect of each of these matters. His Honour's conclusion in relation to the matter of securities was as follows:- "I do not believe this account and accept Harwood's denial of it. I am satisfied that there was a discussion between the applicant and Harwood as to what would happen with respect to security when construction of the units was finished and that something was said about the possibility of reduction of security at that stage. I cannot, however, believe that Harwood agreed that the security would have to be reduced to such a number of the units as amounted to $300,000 (leaving the bank with no margin at all), and it seems improbable that any bank manager would agree that the very land on which was being erected the building whose construction the bank was financing would remain free of mortgage. I find that no assurance of the kind sworn to by the applicant was given by Harwood with respect to abandonment of securities." His Honour then went to the borrowing of Swiss francs. He rejected the applicant's case based upon her having been told by Mr. Harwood that she would owe the Bank under the agreement no more than $A300,000. He did not believe that Mr. Harwood had said that the rate of interest charged would vary with 30. fluctuations in the exchange rate. He added that Mr. Harwood appeared to him to be an intelligent and competent person who would be unlikely to have held the opinion that there was such a simple relationship. His Honour could not think of any reason why Mr. Harwood should have so misinformed Mrs. Kullack. His Honour then went to the detail of each of the misrepresentations alleged in the statement of claim. He rejected Mrs. Kullack's case in respect of each of them. It 1s unnecessary to refer to the detail of his judgment in this regard but it may be noted that there was no evidence to support' the alleged misrepresentation made by Mr. Harwood that the Australian dollar "was very good and would not decline." He concluded that the difficulty which Mrs. Kullack had was a factual one. He was not satisfied that her account of her dealings with Mr. Harwood was true. He was not satisfied that Mr. Harwood gave her the advice which she alleged and was not satisfied that he advised her to apply for the loan. His Honour continued:- "It is said in the statement of claim that Harwood was negligent in failing to tell the applicant that if the value of the Australian dollar fell as against the Swiss franc, the amount of principal would increase accordingly. I do not know 1f Harwood told the applicant that in so many words, but I am satisfied that she was aware of the fact. Next, it is said that Harwood was negligent in failing to tell the applicant that the floating of the Australian dollar made such a fall 'possible and/or likely.' It appears to me, on the evidence, that this allegation could have substance only if the applicant acted on Harwood's advice in 31. deciding to take out a loan in Swiss francs. Since I am not satisfied that he gave such advice, the matter becomes academic." His Honour then turned to the question of advice about hedging. As to this matter his Honour concluded:- "I have given consideration to the question whether it was negligent of the bank not positively to advise the applicant against the proposed loan transaction. Harwood, although he claims to have given warnings about exchange rate fluctuations, does not say he gave such advice. Whereas in some circumstances the failure positively to advise such a customer against an offshore loan, the customer being one reliant on the bank for advice, might be negligent, in this case I am not satisfied that the applicant indicated any reliance on the bank for advice as to whether to borrow Swiss francs and this allegation therefore also fails." Our Conclusions The question is whether any of his Honour's findings and conclusions should be disturbed. A first matter for us to consider is the significance we should attach to his Honour's findings in relation to the credibility and reliability of the evidence of the two principal witnesses, Mrs. Kullack and Mr. Harwood. Notwithstanding some statements made in the latter part of his judgment, it does not appear to us that his Honour accepted Mr. Harwood as a witness whose evidence was completely reliable. With respect, we detect a certain unevennesss between paragraphs concerning his Honour's impression of Mr. Harwood as a witness which appear in the early part of his judgment and those which appear at a later stage. We think his Honour had_ some misgivings about Mr. Harwood's recollection. In particular it 32. would appear to us that his Honour thought that Mr. Harwood was a witness who put his best foot forward and who had, perhaps subconsciously, embellished his evidence so as_ to put the best possible face upon it. There 1s nothing necessarily dishonest about this, although the court needs to be astute to discern it and to make allowances for it when assessing the veracity and reliability of the various witnesses who are called in the case. We believe his Honour did his best to do this and that that accounts for what appears to be some variation of approach between what he has said 1n the earlier stages of the judgment and what he has said in the closing stages of it. The fact that we detect this note of criticism in his Honour's findings means that we ought not to accept without reservation the correctness of his Honour's findings or regard them necessarily as findings of primary fact which ought not be disturbed. In other words, we need to keep what his Honour has said about Mr. Harwood, and of course, Mrs. Kullack, firmly in mind and give it due weight, but the findings do not warrant the conclusion that the matters in issue in the appeal are beyond the supervision of this Court. A case in which there is one witness as to important conversations on each side of the record always presents difficulties of resolution. When a court is confronted with such a case it takes the course of going to the relevant documents, particularly those which are contemporary, and of considering the inherent probability or improbability of the cases which are propounded by the parties. That is the course his Honour' took 33. and it 1s the course which we should take also. A critical question is whether Mrs. Kullack is bound by the whole of Form B or only the last two pages of it. The evidence given by Mr. James, the absence of Mr. James' initial against clause 12 and the fact that the document was stapled rather than bound together operate together to make the case presented by Mrs. Kullack one which is capable of acceptance. But what are the probabilities? Why should a bank officer thrust upon a customer a document which comprised only part of what he intended to bind her? Why ought one not accept Mr. Harwood's evidence that he did send a letter to Mrs. Kullack enclosing a copy of the entirety of Form B thus giving her an opportunity of examining 1t for herself and of obtaining independent advice about it if she thought that were appropriate? At its weakest the Bank's case is that Mrs. Kullack has not established, upon a balance of probabilities, that what she says is correct. In the face of Mr. Harwood's evidence that he did send her the whole document and of Mr. James' evidence that it would have been unusual for him, to say the least, ever to have witnessed a customer's signature on only part of a document, it becomes very difficult to accept positively Mrs. Kullack's contentions. They run against the probabilities. When one adds into the equation his Honour's generally favourable impression of Mr. Harwood, it is an impossible task, in our opinion, for Mrs. Kullack to persuade us that we should find positively that she was bound by only the last two pages of the document. It may have been one thing for her to assert a case in which she was bound only by the schedule. If one looks at page 8 of the document one can see that, perhaps, 34. such a case could hang together. But once she was forced into a case which was based on page 7 commencing the agreement, she was in substantial difficulty. She may not have had extensive experience of mortgage transactions although there are answers in her cross-examination which would suggest that she had a degree of experience in that area. But for her to say, as she did, that she thought that the document began with a page which was plainly numbered 7 and with a clause which was plainly numbered 12.01 is a very difficult task. The very fact that she was forced by the presence of her initial against clause 12 to change the case which she had made in the statement of claim filed on 9 September 1987 accentuates her difficulty. Then there is the correspondence which occurred in 1985 and 1986. These letters were written at a time when Mrs. Kullack was not making any complaint about misrepresentation or negligence. She was not then blaming the Bank for failing to advise her properly or for misrepresenting the nature of the transaction to her. Her own letters reveal a perfectly clear understanding of the transaction as it is provided for in Form B. Furthermore, if she had thought the Bank to be at fault, she would surely have said something of this as it became clear that the amount of her indebtedness was steadily increasing with the fall in value of the Australian dollar. No complaint was made until towards the end of 1986 and then only as regards negligence. The misrepresentations were not notified to the Bank until she filed a defence to the action brought in the Queensland Supreme Court by the Bank. 35. In a long and detailed submission Mrs. Kullack made a number of criticisms of Mr. Harwood's evidence. She herself endeavoured to persuade us that the probabilities were her way rather than his. We have considered these submissions. We do not propose to refer to the detail of them. We have taken them all into account, but in our opinion the matters upon which she relies are substantially outweighed - really overborn - by the general considerations to which we have referred. Once one comes to the conclusion, as we do, that Mrs. Kullack had before her the whole of Form B at the time she signed 1t and, furthermore, that she had an opportunity of considering its terms over the period of almost a fortnight which elapsed between the time she received it from Mr. Harwood and the date of its execution, it is very difficult for her case on other matters to be sustained. A central plank in her case is gone. When one adds into the scales her apparent awareness of precisely what effect the continued decline of the value of the Australian dollar was having the probabilities favour the Bank's case and run counter to hers. A further matter to be mentioned is the failure of counsel for Mrs. Kullack to call Mr. Kullack. At the time of the hearing before the primary Judge he was available to give evidence. It is clear that he could have given relevant evidence. The fact that he was not called not only means that nothing he could have said would have been likely to assist Mrs. Kullack's case; his absence from the witness box means that inferences which are open on the evidence in favour of the Bank should the more readily be 36. drawn; see Jones v. Dunkel (1959) 101 C.L.R. 298. For all these reasons we reject Mrs. Kullack's case based upon misrepresentations in relation to the borrowing of Swiss francs. We also reject her case in negligence. We agree with his Honour that her difficulties in relation to that case are factual. In order to succeed she needed to rely on the same factual matrix as she did in relation to her case based on misrepresentation. In our opinion, she has failed to establish, on the balance of probabilities, that it was the bank which suggested that she borrow in Swiss francs. Furthermore, it 15 one thing to have reservations, as we think his Honour did, concerning Mr. Harwood's evidence of the initial conversations. It 18 quite another for us to conclude positively that Mrs. Kullack's evidence should be accepted and Mr. Harwood's rejected. There are too many unsatisfactory features of Mrs. Kullack's evidence to warrant our taking that course. It remains to consider her case based on securities. Like his Honour we have not found this case easy to understand. We have great difficulty in detecting the meaning which was intended to be ascribed to the matters alleged in paras. 13B and 13C of the statement of claim. We also have difficulty in understanding how her evidence, upon its face, supports that case or any other in relation to the provision of securities. It may be that the land upon which the units were to be built was not included amongst the securities specified in the Schedule to Form B. But there can be no doubt that Mrs. Kullack voluntarily entered into a number of mortgages and that one of these included the home 37. unit land. There is evidence from a Miss Bryant about the execution of the mortgages. She was not cross-examined. In those circumstances 1t 1s difficult for Mrs. Kullack to say that she did not enter into the mortgage transactions freely and voluntarily well understanding their implications. No part of any written agreement provides for the release of securities. This does not mean that it is not possible, as a matter of law, for there to have been an oral agreement about them. It simply means that it is unlikely that there was. Notwithstanding the letters she wrote about the release of securities in 1985 and 1986, it seems clear that she did not at first allege an agreement of the kind she now alleges. In our opinion the case made in relation to securities must also be rejected. It follows that we are umable to detect any error in his Honour's reasons and conclusions. We find ourselves in agreement with his ultimate conclusion that, upon the probabilities, Mrs. Kullack's case must fail. Before concluding we should mention that both in writing and orally Mrs. RKullack made to us what seemed to be an ad misericordiam appeal. Her cri de coeur was based upon the apparent unfairness of an inexperienced woman suddenly finding herself caught up in the intricacies of a foreign exchange loan at a time of great uncertainty in relation to the value of the Australian dollar. We make it clear that we ourselves have great sympathy for Mrs. Kullack. She has been most unfortunate. But it must be understood that she 1s not entitled to recover from the Bank the very substantial loss she has suffered unless she 38. demonstrates to a court to the requisite standard that her loss is the result of fault of some kind on the part of the Bank or of one or more officers for whom 1t 1s responsible. The Bank 1s not an insurer of her loss. Unless the evidence establishes that it has engaged in misleading or deceptive conduct or is guilty of negligence she has no remedy. We do not think that her evidence was necessarily dishonest. It is plain that as the years have gone by and the enormity of her predicament has dawned on her, she has become obsessed about her problems. She cannot believe that they are due to her own unwise dealing. She has apparently deluded herself into thinking that 1n some way the Bank must be responsible for what has overtaken her. But the fact is that she thought that instead of paying 15 per cent per annum by way of interest for a loan in Australian dollars she could do better by borrowing in Swiss francs at a rate of about 8 per cent. As the primary Judge said, it is difficult to accept that she could have thought that it would be so easy to circumvent the comparatively high interest rates which were payable in respect of loans in Australian currency simply by borrowing offshore at no increased risk or, more correctly, at a risk which involved no more than the possibility of an increased interest rate. In the result the appeal is dismissed with costs. foorlcy that cits aad we 37 prec: ag pes are a crue copy of the reasons for judgment herein of the Court harn itehom Associ tt Dated S JULY /768 ual For the Appellant: Counsel for the Respondents: Solicitors for the Respondents: Dates of Hearing: Place of Hearing: 39. Mrs. E. Kullack in person Mr. J.D. Muir, Q.C. with Mr. P.D. McMurdo Morris Fletcher & Cross 14 April and 3 June 1988 Brisbane